FAQ

The Payments of Gratuity Act, 1972

The
Payments of Gratuity Act, 1972, (hereinafter referred to as the “Gratuity Act”)
is applicable to any office, factory or institution which has employed 10 or
more employees in the preceding 12 months irrespective of the post they hold
and have completed 5 years of employment. There is no minimum eligibility
criteria in case of death or disablement. The amount payable to an employee
under Gratuity Act 1972 is calculated on the basis of fifteen days wages for
every completed year of service. The employer must pay the amount of gratuity
within 30 days from when it is payable.

The
Gratuity Act provides for the provision of imprisonment for a term (extendable
to six months) or fine (extendable to ten thousand rupees) or both to
person/persons who make/s false statement for purpose of delaying or avoiding
gratuity amount. Minimum three months imprisonment (extended to 12 months)
or minimum ten thousand rupees fine (extendable to twenty thousand rupees) or
both to employer if he/she contravenes any provisions of the Gratuity Act.

In case of
non-payment of gratuity amount the employer can be punished with imprisonment
of a period not less than six months.

For further information on The Payment of Gratuity Act, 1972, India, please write to us at info@ssrana.com.